Business Finance
Finance Topics

Question Description

Discuss each of the following topics below. Each topic should be a min of 150-200 words, plus at least one reference per topic. Discuss each topic separately, so use a heading for each one. Thanks.

The Importance of Time Value of Money (TVM)

Provide an Example(s) of Liquidity Premium

Annuities the Pros and Cons

Final Answer


Running head: FINANCE TOPICS

Finance Topics
Name of student:


Time value of money
Time Value of Money (TVM) is an imperative idea in monetary administration. It very well may
be utilized to tackle issues including credits, contracts, leases, annuities and investment funds
and also to contrast investments. TVM depends on the idea that a dollar that you have today is
better than the guarantee or desire that you will get a dollar later on. The time value of money
enables individuals to contribute cash over some stretch of time. Toward the end of investment
time frame, individuals get what they have contributed, as well as the income (profits and
premium) the venture has earned. For a great many people, gathering is based on the rule of
contributing little wholes of cash over a significant lot of time. In this way, the time value of
money can truly enable individuals to amass riches. (Wee, H. M., & Law, S. T. (2011). The
higher the financing cost, the more cash an individual will procure. For instance, you can
contribute your dollar for one year at a 12% yearly loan fee and aggregate $2.12 toward the
year's end. You can state that the future estimation of the dollar is $2.12 given a 12% loan cost
and a one-year time span. It pursues that the present estimati...

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